Should start-up employees set their own salaries?

In the hashtag blogosphere of the start-up / new work bubble, employees determining their own salaries is the latest revolutionary new idea. All employees, managers and owners sit at the negotiating table and work out the fairest salaries for the whole company in a conversation free of domination, free of information deficits, free of individual interests. At first glance, this sounds modern, fair, transparent and pretty hip! It just doesn't take into account some aspects of "real life".